Banking software maker refocuses

Journal of Business, Jan 15, 2009 by Crompton, Kim

The former Liberty Lake-based banking software division of Dutch computer-services giant Getronics has a new owner, Dallas-based CompuCom Systems Inc.

It also has a revised strategy that its new director says should help bolster its global presence.

"We are focusing on product development," says the director, David Hampton, head of CompuCom's Financial Business Solutions unit, which provides banking software to mostly large financial institutions around the world.

That change in direction means the operation here henceforth will devote its energies largely to refining the company's main software application and creating new features and add-ons for it, Hampton says. It will phase out the longtime "implementation" part of its services, which involves installing the software for financial institutions and integrating it into an institutions' computer network, turning those tasks over to its expanding network of distributors, he says.

"We've made that change now in our business model," Hampton says, with the intent of "being the best we can be in terms of a software company. It's a big change for us."

The division occupies about 60,000 square feet of space on the second floor of a 305,000-square-foot, two-story building at 22425 E. Appleway. It employs about 90 people overall, a little over half of them here, which is down from about 130 two years ago. Safeco Corp. occupies much of the same building.

The software operation has remained at its current employment level since last spring, though, and Hampton says it even has added some software developers since August, when CompuCom acquired the North American operations of Getronics.

Hampton says he doesn't expect the company's Spokane-area work force to grow a lot more, but adds, "We certainly are committed here. One of the biggest assets is our people. You can't just go out and find somebody on the street who has that kind of knowledge. Our focus has been on continuing to improve the Spokane core of our business. The intellectual property is here and will continue to be here."

Product Manager Norm Carpenter, who has worked at the Liberty Lake facility for 15 years, says the change in owner-ship also has changed the workplace culture and improved morale there.

"The attention CompuCom pays their employees is pretty impressive so far," he says. Roughly an employee a month was leaving the Liberty Lake operation up until about a year ago, largely due to job dissatisfaction or concerns about its long-term viability, but that exodus has ceased, he says.

New signs bearing the CompuCom name haven't been installed there yet, but are expected to go up soon.

As was the case with the $3.5 billion-a-year, Amsterdam-based Getronics conglomerate, the unit here is a small, self-contained part of CompuCom, now a roughly $2.1-billion-a-year enterprise that employs about 11,000 people overall.

CompuCom didn't disclose what it paid for the North American operations of Getronics, but said in a news release that the transaction involved "acquiring more than $450 million of outsourcing services revenue." The purchase price included cash and equity issued by CompuCom, with Getronics acquiring a minority stake in CompuCom and representation on its board.

The Dallas Business foumal reported that CompuCom also formed a partnership with Getronics under which each company will refer business to the other for work in geographic areas where one or the other has a large presence. Getronics is strong in Europe, Latin America, and Asia, while CompuCom is strong in North America.

Hampton, a native of Britain who has 30 years of experience in the information-technology industry, joined CompuCom in mid-2007 and was named top executive of the Financial Business Solutions unit after the CompuCom-Getronics transaction was completed. He succeeds Art Smalley, who took a job here as chief operating officer at Storhaug Engineering Inc.

Hampton lives in Pennsylvania, but spends a couple of weeks a month here, working the rest of the time from an office in his home.

The Financial Business Solutions division has derived its revenue by licensing, installing, integrating, and maintaining the banking software it has developed. By focusing more intently on product development, it expects to stay abreast of technology advances and market needs better, while relying on its growing distributor network to market and install its software.

Hampton says one of the reasons for the strategic shift is, "We have a mature network of distributors for our software outside of the U.S. That's a very attractive business model that we would like to use in the U.S. as well. We're looking for people who sell 'financial solutions' to banks."

As the distributor network expands, it should have a "multiplier" effect on marketing and sales of the division's software, he says. As part of the transition, the division now is working to package its software more appropriately for distributors rather than for end users, he adds.

Carpenter says, "We're getting back to our roots," focusing more on the product and lesson the delivery of it, an area it has strayed into over the years as it has gone through various ownership changes.